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I am confused what this autogrowth property does for any database or log file in SQL Server.

According to my understanding:

  1. If we set autgrowth for database as restricted then its size will increase with data up to this limit and after stops increasing its size which will result in database failure.
  2. If we set autgrowth for database as unrestricted then it will grow until disk space is full.
  3. If we set autgrowth for log file as restricted then logs size will increase upto specified limit and then it will start discarding old logs and new logs will be there in logs.
  4. If we set autgrowth for log file as unrestricted the then it will grow until disk space is full.

Please help me to know if this assumption is correct and if it is wrong then please correct me.

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If we set autgrowth for log file as restricted then logs size will increase up to specified limit and then it will start discarding old logs and new logs will be there in logs.

This is wrong. If it has to grow it will grow until the max size and after which further growth request will result in failure. You are confusing things with log truncation, which is the process which allow log physical file to be reused (so it doesn't have to grow). I have an article explaining how log grows and what is the role of truncation in this, see How to Shrink SQL Server log.

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